'I haven't left anger yet': NEG architect slams policy 'anarchy'

By Cole Latimer & Peter Hannam

October 10, 2018 — 1.23pm

The architect of the failed National Energy Guarantee has claimed Australia has sunk into policy "anarchy" as part of a fierce critique of the government's shift to focus on power prices instead of other issues such as reducing carbon emissions.

Energy Security Board chairwoman Kerry Schott said she remained bitter over the dumping of the signature energy plan when Malcolm Turnbull was deposed as prime minister in late August.

Kerry Schott, head of the Energy Security Board, was highly critical of the breakdown of the NEG.Credit:Louie Douvis

“I’m still going through the stages of grief, and I haven’t left anger yet,” Dr Schott told The Australian Financial Review's energy summit in Sydney on Wednesday. “I characterise the general state of affairs right now as anarchy."

The NEG was supposed to deal with a "trilemma" of issues: reducing power prices, improving grid stability and cutting carbon emissions from an industry that is Australia's largest source of greenhouse gases.

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“While the NEG wasn’t necessarily the greatest way to do things, it did complement reliability and emissions together," Dr Schott said.

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Dr Schott said it was "a bit premature" to describe the entire policy as dead because one arm of it - dealing with grid reliability - was still being prepared for approval by federal and state energy ministers.

“Sitting around the boardroom, there’s been no indication that she is ready to walk away,” Ms Conboy said.

“While there is disappointment in the outcome of the NEG, Kerry understands there is still plenty of work the ESB still has to do around implementing the Finkel review and the remaining aspects of the NEG.”

As Ms Schott is an independent chairwoman appointed by the Coalition of Australian Government's Energy Council, the government cannot force a resignation either.

John Pierce, the head of the Australian Energy Market Commission and part of the three-member ESB board, said Ms Schott would still be taking the latest iteration of energy policy to COAG on October 26.

He said this would be an important meeting for the COAG council because, if state energy ministers passed the reliability obligation policy, it would demonstrate that the COAG council was capable of achieving further energy policy change.

"Kerry has poured a lot of herself and her reputation into this and now, after the energy policy's failure, she is putting it onto the states to actually do something," Mr Wood told Fairfax Media.

Prime Minister Scott Morrison has declared electricity prices would be the main focus of new Energy Minister Angus Taylor, dumping emissions targets for the sector.

Since politicians in Canberra can’t seem to agree about what to do with emissions, and it truly does make managing the transition difficult.

Kerry Schott

Mr Taylor told Fairfax Media the government would not consider increasing its 2005-level emissions reduction target for the energy sector higher than 26 per cent by 2030, even though it would hit this target ahead of that date.

Dr Schott made guarded criticism of the Morrison government's rhetoric on prices, saying, "We can’t just focus on one thing.

“We've got to handle these things together, and it’s complicated," she said. "We really do have to keep a very close eye on what’s happening with our emissions reductions.

“Since politicians in Canberra can’t seem to agree about what to do with emissions, and it truly does make managing the transition difficult if they can’t - and they can’t – what we have to do is work out what we do about that. We’ve got to manage [the industry transition] carefully, otherwise we will find this is a very costly exercise."

Federal Labor remains committed to the NEG, a position reiterated by climate spokesman Mark Butler at the summit on Wednesday.